Number of GTA areas in underbidding territory reaches new high
[Rachel Goodman
The number of GTA neighbourhoods in underbidding territory is at the highest level in more than a year, according to a new report.
Underbidding territory is determined by looking at the median selling price of a home in a given area and then comparing it to the price homes in the neighbourhood actually sell for.
If the majority of homes sell for less than median price then that area is considered underbidding territory.
According to real estate agency Wahi, in January, 98 per cent of GTA neighbourhoods were in underbidding territory, making it the eighth consecutive month that the share of underbidding neighbourhoods has increased or remained flat.
Neighbourhoods with fewer than five transactions per month are excluded from the evaluations, meaning of the GTA’s roughly 400 neighbourhoods only 55 were reviewed in January.
In December, 122 neighbourhoods saw at least five transactions, according to Wahi.
Seasonal factors can affect bidding wars, which are less likely during the winter months, when the market tends to slow down. Similarly, seller behaviour can also have an impact, such as if a home is listed below its actual value to purposefully trigger a bidding war, according to the real estate agency.
“The Bank of Canada’s rate hikes last year are clearly having an impact on real estate
markets across southern Ontario…although we are starting to see some signs of multiple offers across the GTA, the larger trend continues to be one of underbidding,” Benjy Katchen, Wahi CEO, said in a press release.
However, with the stabilization of interest rates it could be more beneficial to purchase a home now than it was six months ago, and potential buyers may also find a wider selection of homes are on sale, Katchen explained.
GTA’s Top 5 Underbidding Neighbourhoods
According to Wahi, the top underbidding neighbourhoods were generally located in expensive areas, though Toronto’s Queensway neighbourhood was the exception, where the median selling price is below $1 million.
There were no neighbourhoods in overbidding territory in January and the GTA-wide median underbid amount was $18,000, compared to $24,450 in St.Catherines and $14,999 in Barrie.
Number of GTA areas in underbidding territory reaches new high
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